TORONTO, Nov 2 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart in early trade on Wednesday as
global markets settled between hope and fear amid Greek debt
developments and ahead of a Federal Reserve meeting.

World stocks and the euro held gains ahead of the
conclusion of a two-day Fed meeting which may prepare markets
for more U.S. monetary easing, having recovered somewhat from
risk-averse trade on Tuesday linked to Greece's plans to hold a
referendum on the European bailout package.

The Canadian dollar tumbled overnight to a low of C$1.0223
to the U.S. dollar, or 97.82 U.S. cents, but regained ground as
investors took stock ahead of the Fed meeting.

"Markets have settled since yesterday's Greece/China
induced risk aversion flare up and focus now shifts to the FOMC
statement at 2:15 p.m," John Curran, senior vice president at
CanadianForex, a commercial foreign exchange dealing firm, said
in a research note.

At 9:14 a.m. (1314 GMT), the Canadian dollar CAD=D3
stood at C$1.0122 to the U.S. dollar, or 98.78 U.S. cents, up
from Tuesday's North American session close at C$1.0188 versus
the greenback, or 98.15 U.S. cents.

While market focus will be on the Fed statement and a later
news conference by Chairman Ben Bernanke, analysts said it was
likely too early for the Fed to indicate much in the way of
further easing.

"There is a limited amount they can do or say, to be
honest, as clearly they still have the option of doing further
quantitative easing but its very unlikely they'll want to use
that yet," said Adam Cole, global head of FX strategy RBC
Capital Markets in London.

"In terms of actual firm policy changes, it is very
difficult to see anything come out of it. So I suspect it is a
bit of a sideshow to news out of Europe."

Curran said markets may be disappointed by the lack of
fresh commitment from the Fed and turn risk-averse again,
sinking equities late in the day.

"It is most likely too early for the Fed to indicate
additional asset purchases but markets are looking for some
indication of this and tentatively adding risk today. Look for
disappointment to lead to further risk aversion resulting in
weaker equities and U.S. dollar values," he said.

With so much still up in the air, Cole said the Canadian
dollar could trade in a broad range. It had likely already
touched its weakest point overnight at C$1.0223, while parity
"would be a stretch" on the upside, Cole said.

"We're just thrashing around in this wide range."

Canadian government bond prices were down across the curve.
The two-year bond CA2YT=RR fell 10 Canadian cents to yield
0.977 percent, while the 10-year bond CA10YT=RR dropped 32
Canadian cents to yield 2.196 percent.
(Reporting by Andrea Hopkins, Editing by Chizu Nomiyama)